Tesla China plant expansion in doubt over Starlink concerns

Bloomberg

An expansion of Tesla Inc.’s plant in Shanghai has been delayed, according to people familiar with the matter, over data concerns that risk putting a roadblock in the way of the US electric-car maker’s ambition to keep growing in China.
The so-called phase-three expansion originally slated to start mid-year would have seen the plant’s capacity double to around 2 million cars a year, said the people, who asked not to be identified because they’re not authorized to speak publicly.
Some central government officials expressed concern about a US company with connections to Elon Musk’s internet-from-space initiative Starlink having such a large presence in Asia’s biggest economy, one of the people said. While Tesla cars aren’t equipped with Starlink equipment, which would allow users to bypass China’s Great Firewall, Beijing has become increasingly concerned about data security and social stability.
Musk is chief executive officer of both Tesla and Space Exploration Technologies Corp., which started launching Starlink satellites in 2019. Tesla shares erased earlier gains and traded down as much as 2% as of 5:13 a.m. New York time, before the start of regular trading.
The delay coincides with growing public resentment toward the US EV maker at a time that tensions between Washington and Beijing are running high. Angry Tesla owners swarmed showrooms in China over the weekend to complain about missing out on another round of price cuts. Tesla cars also were banned from Chinese military complexes and housing compounds in early 2021 over concerns about sensitive data being collected by cameras built into the vehicles. Tesla representatives in China didn’t immediately respond to a request for comment.